Marketers Beware: You Are Destroying the Most Valuable Media Channel

"We have known for decades that word of mouth from a trusted source is the most valuable media channel in the marketing mix. A brand endorsement can come from a host of sources: someone we personally know, the collective reviews of other customers, key opinion leaders who post online about subjects we care about, celebrities whom we admire and/or the media themselves. All these different forms of word of mouth are extremely valuable for a key reason: consumers believe the word of others before they will believe the word of the marketers. That’s why “earned” media has always been more valuable than “paid” media.

The operative word is “earned.” An endorsement from a trusted source (whether it’s an individual customer, a blogger, a ‘celebrity’ or a respected media outlet) must be earned. It cannot be paid for. If it’s paid for, it’s an ad. And, even worse, it’s a deceptive ad if it isn’t clearly labeled as such. Currently, the FTC guidelines for paid Influencer endorsements on social media, such as Instagram, are fairly lax. As long as a social media post has a hashtag that calls out the post as #sponsored, #partner, or #ad, etc. the post is compliant.

Unfortunately, unlike labeling guidelines for other forms of advertising that mandate clear and prominent labeling of “sponsored content”, there are no requirements to-date that make a #sponsored or #ad hashtag stand apart from the litany of hashtags that are usually associated with a social media post. The end result: the follower is left to figure out for themselves whether the Influencer is being genuine in their endorsement or whether they are being paid for it."